Lauria noted that the emerging generation is more

comfortable than traditional industry leaders in employ- ing data-driven approaches to forecasting, planning and decision making. But he pointed out that many new leaders have never sat behind the wheel of a bus or worked on a shop floor. “At Mercury, we’re seeing more and more fleet manag-

ers, for example, coming out of budget, finance or supply chain backgrounds,” he continued. “They understand that KPI stands for key performance indicator. But they haven’t necessarily been on the front lines, like a lot of transportation directors who started out as drivers or me- chanics and are going to be retiring in the next 10 years. “They don’t know if a mechanic is [misleading them]

when he gives excuses about why a critical vehicle has been out of service for five days.” Many school districts have invested heavily in the latest

scheduling and fleet management software over the last decade. But Lauria remarked that their decision-making practices often remained stuck in the 1980s, relying too much on subjective judgment and personal experience. One way to navigate the perfect storm, he suggested, is to pair veteran transportation directors with young data analysts who like to “crunch numbers.” They tend to intuitively grasp how analytics and social networking are fundamentally changing not only the way people make decisions, but also how they think and communicate. He also observed that there needs to first and foremost be the recognition that investment in information tech- nology is a must-have. At the same time, investments in the workforce are necessary to leverage the capabilities of that technology. “Expecting a transportation direc- tor, who is consumed with the day-to-day demands of getting drivers behind the wheels of buses and students safely to and from school, to understand the finer points of performance measurement and benchmarking or long- term cost modeling and planning, without both training and staff support, is simply not realistic,” he added. Tackling TCO and other challenges requires new ways of

looking at old problems. Until now, the best solutions have been hard to come by, because districts haven’t had the capability to synthesize multiples streams of information, such as vehicle loading and speeds, traffic patterns, staffing, vehicle operating costs and other factors. Lauria cited the example of a 72-passenger bus making 15 stops on a given route, year in and year out, to pick up children each day. “Why? Because you’re trying to fill up that bus and be as efficient as possible. But, maybe there’s a more efficient way to get kids to school than putting them on the biggest bus available,” he explained. “It is in areas like these that data from connected vehicle solutions and other information technology is beginning to permit

more nuanced analysis and understanding of the effi- ciency with which we transport kids to school.” Lauria advised that it’s time for transportation profes-

sionals to move beyond simply calculating the per-year cost of operating a vehicle to calculating what it costs to transport each student. “A lot of districts don’t have a good understanding of what their cost of getting a child to school is. What do the num- bers look like when you put kids into a large or medium or small bus?” he asked. “Wouldn’t that be more meaningful?” With regard to controlling vehicle as opposed to transportation costs, Lauria pointed out what he called “basic truths about fleet management,” which he said all transportation directors and their bosses should be familiar with:

• A fleet of properly replaced vehicles is cheaper than one with improperly replaced vehicles.

If an organization can afford to operate an old fleet, it can afford to operate a less old one.

• Avoiding spending money on fleet replacement does not save a school district money or help it bet- ter fulfill its mission of student education—except, perhaps, in the short term. Over the long term, poor fleet replacement practices take money away from the mission of student education.

Among the factors that lead districts to under-spend

on fleet replacement, he noted, are a failure to under- stand vehicle life-cycle cost principles, a lack of visibility of direct and indirect vehicle operating costs, and a lack of understanding about how the method of paying for replacement vehicles affects replacement decisions and funding levels. To this last point, Lauria urged debt-averse districts to

weigh the pros and cons of leasing and debt financing against the upfront purchase of buses with cash. Having helped organizations develop detailed fleet replacement strategies and plans for more than 30 years, Lauria said he is convinced that these alternative financing methods allow many owners to modernize their fleets when they otherwise might not do so. “It has been particularly unfortunate to see so many

organizations ... that have not taken advantage of histor- ically low interest rates to modernize their fleets in the last decade,” Lauria said. “Think about the type of house you would live in if the only way you could buy it was to pay for it with cash up front. It’s safe to say most of us would live in a very different type of home than the ones we live in. What leasing and debt financing allow school districts to do is pay for buses while they’re using them, not before they use them.” 19

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